Empire State Index slows in February after setting near 2-year high

A worker handles a CNC router, a computer controlled cutting machine, to build a piece of furniture at Casa Kids' Red Hook facility in the Brooklyn borough of New York.

A gauge of manufacturing in New York state slowed in February after hitting a 20-month high in January, the New York Federal Reserve said in a report on Tuesday.

The New York Fed's "Empire State" general business conditions index fell to 4.48 from 12.51 the month before. Economists polled by Reuters had expected a reading of 9.0.

New orders fell to -0.21 from 10.98, while inventories fell to -5.00 from 2.44. Employment gauges were mixed. The index for the number of employees fell to 11.25 from 12.20 and the average employee workweek index rose to 3.75 from 1.22.

The index of business conditions six months ahead rose to 38.99 in February from 37.51 in January.

The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.